WASHINGTON, April 24 (Reuters) - The number of Americans filing new applications for unemployment benefits increased marginally last week, suggesting the labor market remained resilient despite darkening clouds over the economy caused by a chaotic trade policy.
But President Donald Trump's constantly shifting tariffs position has heightened economic uncertainty, sharply eroding business and consumer confidence, which could undercut spending and lead to job losses.
Signs of caution among businesses, evident in surveys and corporations cutting financial guidance, were reinforced by other government data on Thursday showing business spending on equipment barely rose in March. Economists expect the labor market to weaken by the second half of the year.
"Businesses are not squeezing labor costs just yet," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "Job losses are coming later this year in sectors most exposed to tariffs, such as retail, transportation and manufacturing, if the current menu of tariffs is maintained."
Initial claims for state unemployment benefits increased 6,000 to a seasonally adjusted 222,000 for the week ended April 19, in line with economists' expectations.
The Labor Department data included the Good Friday holiday, which was later this year compared to 2024. Claims tend to be volatile around moving holidays.
Since his "Liberation Day" tariffs announcement early this month, Trump has delayed reciprocal duties on more than 50 trade partners by 90 days, while raising tariffs on Chinese imports to 145%. Beijing retaliated with duties of its own.
Trump maintained a 10% universal tariff on nearly all trading partners as well as 25% duties on automobiles, steel and aluminum. The tariffs, which Trump sees as a tool to raise revenue to offset his promised tax cuts and to revive the U.S. industrial base, have stoked fears of high inflation and economic stagnation.
Treasury Secretary Scott Bessent said on Wednesday that high tariffs between the U.S. and China were not sustainable.
The Federal Reserve's Beige Book report on Wednesday showed "several districts reported that firms were taking a wait-and-see approach to employment, pausing or slowing hiring until there is more clarity on economic conditions."
It added there were "scattered reports of firms preparing for layoffs" and "notable" decreases in government employment "or at organizations receiving government funding."
The Trump administration is in the midst of an unprecedented campaign to drastically shrink the federal government through mass firings and deep spending cuts.
The often disorderly layoffs, driven by billionaire tech Elon Mask's Department of Government Efficiency, have so far not impacted the broader labor market.
Stocks on Wall Street rose on hopes for a de-escalation in trade tensions. The dollar slipped against a basket of currencies. U.S. Treasury yields fell.
TEMPORARY AIRCRAFT SPENDING BOOST
The number of people receiving benefits after an initial week of aid, a proxy for hiring, dropped 37,000 to a seasonally adjusted 1.841 million during the week ending April 12.
The so-called continuing claims data covered the period during which the government surveyed households for April's unemployment rate. Continuing claims were little changed between the March and April survey weeks, suggesting the jobless rate held steady at 4.2%.
Some economists cautioned the claims data did not reflect job losses from the White House's immigration crackdown.
"One source of labor market weakness that is unlikely to show up in the claims numbers is recent government moves to terminate work authorization permits for a large number of immigrants," said Abiel Reinhart, an economist at J.P. Morgan.
"Any job loss here is more likely to show up as lower payrolls than as higher unemployment."
A separate report from the Commerce Department's Census Bureau showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans known as core capital goods, ticked up 0.1% in March after dropping 0.3% in February.
There was a sharp decrease in orders for computers and electronic products. Orders for electrical equipment appliances and components also fell.
While orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, jumped 9.2% last month after gaining 0.9% in February, that was probably unsustainable because of the trade war with China.
Transportation equipment orders soared 27.0%, boosted by a 139.0% jump in commercial aircraft orders, which are extremely volatile, and tariffs-related front-loading of motor vehicle bookings.
Boeing (BA.N), reported on its website it had received 192 aircraft orders, up from 13 in February. But China has ordered its airlines not to take further deliveries of Boeing jets, and some airline CEOs have said they would defer plane deliveries rather than pay duties.
Two Boeing planes destined for China recently returned. Boeing CEO Kelly Ortberg, however, said on Wednesday the company had avoided broader damage from tariffs and could redirect jets to airlines that have been "asking for additional airplanes."
Shipments of core capital goods rose 0.3% after increasing 0.7% in the prior month. Economists expect business investment in equipment rebounded in the first quarter, boosted by aircraft.
Nonetheless, they expect the government's advance gross domestic product report next week to show the economy almost stalled or even contracted in the January-March quarter. The economy grew at a 2.4% pace in the fourth quarter.
The economy's dimming prospects are also keeping the housing market on the back foot.
A third report from the National Association of Realtors showed sales of previously owned homes dropped 5.9% in March to a seasonally adjusted annual rate of 4.02 million units.
"In addition to the existing pressures of high prices and high mortgage rates ... rising anxiety among consumers over inflation and jobs may magnify the instinct to hunker down already being felt by many families," said Robert Frick, corporate economist at Navy Federal Credit Union.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama
